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IPTV & Communities Of Interest

Broadband TV or IPTV has finally started to take off. But how can service providers differentiate themselves from cable and satellite operators? By developing communities of interest, says Peter Bates...

Beyond VOD - Creating New Business Models For IPTV Through Communities Of Interest

By Peter Bates

[Register and post your own comments on this article below...]

Broadband TV or IPTV has finally started to take off in 2005. However, most business models are tending to focus around the delivery of video on demand (VOD) services based on movies.

But, new broadband TV service providers will really need to differentiate their offerings from their competitors – the cable and satellite TV operators. One future way forward is through developing communities of interest and offering them various value-added services.

There is growing concern that just VOD offerings are unlikely to provide the returns on investment or create sustainable models, particularly as the studios are demanding a high percentage of revenue-per-view. As there is also a limited production of so-called “blockbuster” movies per year, the costs of acquiring distribution rights is unlikely to go down as they will go to the highest bidder – the dominant pay-TV satellite or cable company.

Reaching consumers in niche markets

Also, do consumers really want the same offerings that they might already be getting from satellite or cable?

New Broadband TV service providers will really need to differentiate their offerings from their competitors. For video-on-demand they will need to look towards niche markets where people cannot easily access content on a TV. For example: -

I’m going to Bologna and I remember that James Burke featured the city in one of his 'Connections' programmes a few years back on the BBC. I would love to see that programme again and I’m willing to pay a small fee to watch it!

Of course, this will require sophisticated video searching engines to find my needs. But, they are already emerging with Google, Yahoo and Altavista – at least on the web.

The "Long Tail" & serving communities of interest

But what’s the business model? There is evidence emerging from Rhapsody-on-line and Amazon that the “Long Tail” economy – created by the less popular titles can generate significant revenues. But, this leads onto recommendations made by other people and thus the creation of communities of interest. Every person probably belongs to at least ten communities of interest related to their lifestyle. Understanding these communities of interest and “feeding” these interests creates new opportunities for value added services ranging from the latest video news of your favourite holiday location; advice on improving your basketball techniques to personalised advertising focused on baby products – because the system knows you are going to have a baby.

Focusing on communities also creates marketing opportunities to “block sell” the broadband TV offering to the whole of that community rather than sell a generic service. There are also new opportunities around professional communities of interest - teachers, doctors, healthcare workers or accountants – who are not just buying into training and professional updating – but also a community of like-minded people where they can tap into each others knowledge and experiences.

Adding value to create a rich social experience

This then leads onto additional service offerings in the form of RSS feeds, user generated content, video-podcasting, blogging, one-to-one and one to a few, TV based, video-conferencing - in order to create a rich social experience around using the TV. However, all these services will need to be easy to use as well as complement, enhance and enrich the experience that some users already experience on their PCs. In addition, some of these services will need to be seamless and also be easily accessible, on a PC as well as a mobile device.

New broadband TV operators are going to need to move fast in order to differentiate their service offering from existing cable and satellite service providers on the one hand and what is already available through the web.

About the Author:
Peter Bates is senior partner of pjb Associates. He is producing a series of “thinkpieces” or articles aimed at stimulating discussion and thinking about how to develop sustainable business models for broadband TV – accessing media-rich content via a TV using broadband. More thinkpieces can be found at http://www.pjb.co.uk/thinkpieces.htm. Peter can be contacted at pjb@pjb.co.uk or Tel +44 1353 667973

About pjb Associates:
Established for nearly fifteen yrs, pjb Associates is now focusing on personalisation and personalised TV - in the home and on the move, by helping to create sustainable interactive media-rich information, entertainment and learning services through communities of interest.